Afreximbank supports Ethiopian banks with $500m

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The African Export-Import Bank, Afreximbank, is providing US$500 Million to support Ethiopian commercial banks through the Afreximbank Trade Facilitation Programme.

The scheme incorporates various products designed to increase intra-extra African trade volumes, diversify the character of this trade, and assure the confidence of trade partners in the settlement of international trade transactions for critical imports into Africa.

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Specifically, the programme is designed to enable and escalate trade activities and investments through, among other measures: the provision of bank-to-bank Reimbursement Undertaking facilities; issuances of Promissory Notes & Bills of Exchange Aval facilities; issuances of Bonds, Guarantees & Indemnities facilities; and issuances of Trade Confirmation Guarantee facilities.

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Afreximbank has gathered key stakeholders and decision-makers from Ethiopia’s banking sector, as part of a wider strategy to deepen its relationships with and support for the country’s commercial banks. Central to this effort, and the focus of today’s forum, is the AfTRAF Programme for commercial banks in Ethiopia, which aims to unlock capital to support trade finance in Africa.

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Though the interventions in Ethiopia have traditionally been executed through its relationship with the country’s largest financial institution, the Commercial Bank of Ethiopia – with whom it has existing facilities as well as an operating AfTRAF programme – Afreximbank aims to develop strong partnerships with all commercial banks in Ethiopia, and is actively pursuing its target of signing up, and providing the AfTRAF Programme to 10 other commercial banks in Ethiopia by the end of 2021.

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In attendance at today’s forum was the Governor of the National Bank of Ethiopia, Dr. Yinager Dessie, as well as the Chairman of the Ethiopia Bankers Association and the CEOs of Ethiopia’s 17 key commercial Banks. Participants were presented with the full range of Afreximbank’s programmes and facilities, and familiarised with the Bank’s overarching mandate to promote trade in and between member countries. Representatives from the commercial banks will also receive in-depth training in trade finance from Afreximbank, as part of its ambitious capacity-building exercise in the country.

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“Commercial banks play an important role in facilitating and promoting trade – a core  ingredient of economic growth. Today’s forum serves to demonstrate the Bank’s commitment to support Ethiopia’s efforts to expand its trade capacity and establish the knowledge, infrastructure and resources by which this will be achieved,” said Rene Awambeng, Global Head, Client Relations at Afreximbank.

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The forum came amidst far-reaching reforms undertaken by Ethiopia to open up its economy for the participation of the private sector. Central to this economic liberalization is the work of the National Bank of Ethiopia to reform the country’s banking sector. These changes are expected to strengthen the capacity of Ethiopian institutions, including commercial banks, to accelerate the development of the Ethiopian economy through trade and investments. The reforms are also expected to increase Ethiopian trade with Africa and the rest of the world.

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